Forget Next Day Delivery, Retailers Test Next Hour Service

Just as next-day delivery becomes the norm for online shopping, next-hour delivery is rearing its head in the marketplace. Retail giants like Walmart, Amazon and eBay are testing such services now, providing customers with whatever they want nearly immediately. In order for this to work, supply chains are operating full speed, relying on highly complex algorithms and workers in distribution centers 24/7.

In order to make these quick deliveries happen, the stores must become what Walmart.com CEO Joel Anderson calls “forward-deployed inventory centers,” or, as Wired explains, they must “do double duty, acting as retail locations but also mini-warehouses for local delivery. It’s a strategy that could serve a huge customer base — 60 percent of U.S. residents live within 5 miles of a Walmart store.”

Predictive stocking plays a huge factor. “Walmart uses algorithms to track 1.2 million transactions per hour and anticipate what stores will need. As these stores become same-day delivery hubs, the company is counting on those same algorithms to predict the demands of home-delivery shoppers,” explains the article.

Another key to an online retailer’s success with a same-day delivery service is its distribution centers. Amazon has “40-plus massive and insanely efficient distribution centers — some exceeding 1 million square feet and primed for robot pickers that never sleep. The company is in the process of building nine more of these centers around the U.S. They’re already enabling same-day delivery to some homes and possibly soon to a network of lockers at convenience stores,” according to Wired.

The new eBay Now delivery service envisions the “city itself as a huge warehouse, where the streets are the aisles and the stores are the shelves. It is being piloted in San Francisco, San Jose, and New York City. The system sends eBay-employed couriers called valets to chain stores like Best Buy, Macy’s, and Target — where they pick up items ordered on the eBay Now app (currently available only for iOS). The GPS on the customer’s phone tells the courier where to deliver the items,” notes the article.